According to the Internal Revenue Service, a Qualified Opportunity Fund is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in a Qualified Opportunity Zone. An Opportunity Zone is an economic development tool. Opportunity Zones are designed to spur economic development and job creation in distressed communities.
According to the IRS, real estate investors may elect to defer the tax on the amount of the gain invested in a Qualified Opportunity Fund. Therefore, if you only invest part of your gain in a Qualified Opportunity Fund(s), you can elect to defer tax on only the part of the gain which was invested. In that sense, the Qualified Opportunity Fund is more flexible than a 1031 Exchange.
The IRS has published a Frequently Asked Questions page on its website:
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The Law Offices of Keith R. Betensky, Esq.
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